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NUNAVUT
Anyone wanting to buy or build a home in Nunavut will now have to put some equity into it, after the territorial government announced changes to the Nunavut Down Payment Assistance Program (NDAP) on July 11.

Down payment assistance will now be provided as a percentage of the purchase price, as opposed to a fixed amount, which was the case before the changes. Home buyers will need to contribute 2.5 per cent of the purchase price while the Nunavut Housing Corporation will provide 7.5 per cent up to a maximum of $30,000.

Under the old program, the corporation would provide the full down payment directly to the bank, meaning the home buyer did not have equity in the home, explained Alain Barriault, president of the Nunavut Housing Corporation.

"If you are able to save money towards the purchase of your home, it is an indication of your ability to be able to be a successful homeowner," he said. "There's a smaller risk, in a way, because the client is able to demonstrate they are able to save at least the 2.5 per cent towards a home."

John Thomas with Atiilu Real Estate and Property Management in Iqaluit said he has mixed feelings about the changes.

"I can see why they did implement these changes because there were too many foreclosures. It forces someone to have their own equity," he said. "On the other hand, it does preclude a certain section of the community from ever owning a house. If someone can't come up with the required down payment, (they) will not be able to get a house."

In his opinion, fewer people will participate in the program because of the equity requirement.

But Barriault said the changes will make the program more equitable and will allow more people to benefit from it. He added it was hard to predict what the demand will be.

"With the changes we've put in place, by lowering the total amount any one client can claim, then we'll be able to service more clients," he said. "We know with the current funding we do have, we have been unable to provide assistance to all of the applicants for NDAP in the past."

Last year, 28 applications to the program were approved while seven or eight were waitlisted due to funding availability or non-completion of the process, said Barriault. He added most of the demand and clients are from Iqaluit and most were for the purchase of existing homes.

The two-year Nunavut residency requirement is also eliminated and first-time home buyer requirements are changed to read a client cannot have owned a home in the last five years in the community they are applying for the program. The prior requirement stated applicants could not have owned a home in the last five years. The territorial government stated the change will allow greater flexibility for residents to move between communities.

"With the changes on residency and ownership of a home elsewhere, we're expecting this will be an encouragement for Nunavummiut to become homeowners," said Barriault, adding the changes are intended for people to become homeowners where they are employed.

He said the program paves the way for homeowners to settle in a community for at least five years before they can earn any forgiveness of the grant.

"And the grant is only fully forgiven after 10 years of maintaining that house as your principal residence," he said. "So no one can just take the money, buy a house, flip the house and make a profit."

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